Recently, the domestic epidemic has been effectively controlled, and production capacity in the Jiangsu and Zhejiang markets is gradually recovering. It is understood that the operating rate in Shengze area has returned to 70-80%. While production capacity is gradually increasing, the editor learned from the market that some factories are considering reducing their operating rates. What is going on? Is it because the staff are not in place?
High-priced raw materials produce low-priced gray fabrics, a loss!
Due to the epic drop in international oil prices last week, PTA and ethylene glycol both fell, and the cost support was insufficient, causing polyester yarn to also fall into a continuous decline.
At this time, many manufacturers have expressed losses! “Now it’s like using raw materials bought at high prices to produce low-priced gray fabrics. Customers have been lowering prices. Our twill peach skin velvet has dropped by 1 cent!” said a manufacturer specializing in peach skin velvet. Coincidentally, another manufacturer of memory cloth also has a deep understanding: “Now many manufacturers around us have reduced their operating rates. It is not because of the workers. The workers are basically here now. Except for those in Hubei, the main reason is that the raw materials are now available.” The situation is unclear. Our gray fabrics have depreciated in value, and we can’t buy low-price raw materials recently. The salesperson we work with actually doesn’t sell them. I think the polyester yarn has fallen too hard. I want to take a look. Will I sell if the price goes up a bit later?”
The order has been delayed and the warehouse cannot be filled!
Overcapacity is a commonplace problem, especially for conventional varieties. Each factory has a certain amount of inventory. When there are no orders to make, manufacturers will choose to produce conventional gray fabrics, which will inevitably lead to an increase in the inventory of conventional gray fabrics and make the problem of overcapacity more prominent.
The above-mentioned boss who produced memory cloth shook his head worriedly and said: “At present, we basically have about 100,000 meters of stock of conventional varieties. The warehouse has been full. Now it is piled up at my home. If orders don’t come in, we can only reduce the chance of opening. Although it is now the peak season of Golden Three, it already feels like the off-season. The market wave at the beginning of the new year is slowly fading, and customers have been slow to place orders. It is really difficult. .”
According to sample enterprise data monitored by China Silk Capital Network, the current inventory of weaving manufacturers is about 38 days, and destocking is slow. In addition, due to the outbreak of the epidemic abroad, foreign trade has been greatly affected, which has also led to a sharp reduction in the number of foreign trade orders, and the production enthusiasm of manufacturers has been suppressed. “You can’t sell it even if you produce it. Even if you sell it, you will easily lose money. It is unrealistic to take a holiday. Labor, rent, water and electricity are all there, so you can only do less.”
Textile bosses generally face greater financial pressure
In the case of high inventory and low demand, textile bosses generally face Due to inventory pressure and financial pressure, the gray fabrics in the warehouse have taken up a lot of funds, but labor wages, water, electricity, rent, etc. all have to be paid in cash. In this case, if the gray fabrics are not cashed out, unless the company is big and the funds are There is no pressure, otherwise the company will not be able to support itself. Only enough cash can ensure the healthy operation of the company.
Based on the above considerations, when an order comes at this time, even if the customer lowers the price and takes the loss, the company can only Bite the bullet, the next step is to stabilize customers and form a good cooperative relationship. Business is not done once, and the second is to realize the inventory and relieve financial pressure. It can be expected that next, the market will be filled with voices of selling goods at low prices and reducing production. Therefore, it is a wise move to reduce production and reduce the operating rate at this time.
Editor’s Note
When the market is sluggish, many manufacturers will consider cutting production and taking holidays. In July and August last year, many manufacturers Factories and dyeing plants have put on high-temperature holidays, but this year is likely to happen earlier. If the next orders are unsustainable, many manufacturers will consider reducing production or even taking holidays.
Currently, affected by the epidemic, the demand for clothing at home and abroad has dropped. Garment factories no longer make clothes, buyers no longer buy fabrics, and weaving factories no longer buy raw materials. The entire industry chain is facing inventory High level problem. However, some manufacturers are optimistic about the market outlook: “As long as the foreign epidemic is under control, Sino-US trade has improved substantially, and foreign trade drives domestic trade, there is still hope for the market. We also hope that raw materials can be stable and not fall again.” .” Next, the cloth boss needs to think carefully about how to arrange production, adjust prices, and control inventory. </p
